Governance & Compliance Insider

Can you design better compensation disclosure? The SEC wants your thoughts on S-K Item 402 – and the rest of Subpart 400

Kimberley R. Anderson

As part of its Disclosure Effectiveness Initiative, the SEC has previously requested comments on parts of Regulation S-K and Regulation S-X.  On August 25th, the SEC requested comment on Subpart 400 of Regulation S-K.  Subpart 400 covers a lot of territory, including disclosure requirements on management, compensation and corporate governance.   The Fixing America’s Surface Transportation Act (FAST Act) required the SEC to review Regulation S-K...

SEC Proposes Amendments to Update and Simplify Disclosure Requirements

Randal R. Jones

The Securities and Exchange Commission (the “SEC”) recently announced proposed amendments in order to update and simplify its disclosure requirements. The proposed amendments are intended to simplify compliance efforts and reduce the disclosure burden on companies subject to the SEC’s public reporting requirements, while maintaining the integrity of publicly disclosed information available to market participants. The proposed amendments address a number of SEC disclosure requirements...

A Call to Action: Leading Executives issue “Commonsense Principles of Corporate Governance”

Jonathan B. Abram

Citing the importance of publicly owned companies to the U.S. economy, a group of thirteen leading executives issued a set of principles, on July 21, 2016, outlining their vision for the critical elements of good corporate governance.  The report, entitled, Commonsense Principles of Corporate Governance, was signed by a diverse group of executives ranging from Jamie Dimon, JP Morgan Chase; Warren Buffett, Berkshire Hathaway, Inc.;...

Can a shareholder who is unable to rely on the HSR passive investor exemption still file a Schedule 13G? Maybe, says the SEC Staff in new guidance

Kimberley R. Anderson

Last Tuesday, the US Department of Justice announced a record $11 million fine against an activist investment firm for improperly claiming an exemption from Hart-Scott-Rodino’s notification and waiting period provisions reserved for passive investors.  Two days later, in the wake of the DOJ’s announcement, the SEC Staff issued guidance stating that the inability to rely on the HSR passive investor exemption (relating to the acquisition...

2016 Proxy Season Review: Shareholder Proposals

Cam C. Hoang

With most of the 2016 proxy season in the rear-view mirror, it’s clear that shareholder proposals continue to be a preferred vehicle for certain kinds of shareholder activism, though with limited effectiveness unless the company and the shareholder reach a negotiated outcome. Proxy access proved to be the notable exception. Overall, the total number of shareholder proposals submitted (916) was down from the all-time high...

2016 Amendments to the Delaware General Corporation Law

Kimberley R. Anderson

The DGCL was amended in June.  Most notably, the amendments (i) broadened the availability of Section 251(h) mergers consummated without stockholder approval following a first-step tender or exchange offer for all shares entitled to vote on the merger, (ii) eliminated de minimis appraisal claims under Section 262, and (iii) allows companies to make a pre-judgment payment to dissenting stockholders to reduce interest costs in connection...

SEC Approves NASDAQ Rule Requiring Disclosure of “Golden Leash” Arrangements

Kimberley R. Anderson

Do your directors have a “golden leash”? If so, NASDAQ-listed companies will be required to publicly disclose those arrangements as a result of newly adopted rules. “Golden leash” arrangements are compensation arrangements between activist shareholders and their director nominee in connection with his or her service on, or candidacy for, a company’s board of directors, usually in connection with a proxy fight. In a typical...

SEC Releases Proposed Rules on Incentive-Based Compensation for Investment Advisers and Registered Broker Dealers

Cam C. Hoang

The SEC has issued its proposed rules on incentive-based compensation for investment advisers and registered broker dealers:https://www.sec.gov/news/pressrelease/2016-89.html. Comments are due by July 22, 2016.  The rules are part of a joint interagency rulemaking required by Dodd-Frank Act Section 956, which directs the agencies to prohibit incentive-based compensation arrangements that encourage inappropriate risk-taking: (1) by providing an executive officer, employee, director, or principal shareholder of the...